Chris looks at the upcoming Tuesday session in the EUR USD currency pair. With very little to move the markets during the session, it’s a more than likely going to be one that’s relatively quiet and technically driven. With that, we are looking at the longer-term uptrend that is trying to assert itself, and recognize that the 1.15 level is in fact one of the most important levels in the Forex markets right now.
Although there are plenty of problems in the European Union at the moment, the truth of the matter is that the market is starting to forget about the Greece issue for the time being, and quite frankly we have seen this movie before. The markets will totally ignore the Greeks for a while, instead focusing on the other side the Atlantic Ocean, the United States. In the United States, it appears that the Federal Reserve is going to sit tight as far as interest rates are concerned for the time being, and that means that there probably won’t be much in the way of a rate hike until the end of the year at the earliest. Because of this, the US dollar of course is losing a bit of strength overall.
With all that being said, we look at this as a market that is pulling back in order to try to build up momentum to overcome a significantly resistive barrier. Once we get above there, the trend has changed by all metrics that we use here, and we recognize that the EUR USD forecast at that point in time would have to be very bullish to say the least. Over time, we recognize that there will be fits and starts, but it’s only a matter of time before the Forex market goes back to what it has done for the majority of the last several years: sell the US dollar. The question is all in the timing as per usual.
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